Govt may step in to curb Indian pharma war in Africa

Posted AtFinancial Express

The government is likely to
intervene in the price war among Indian exporters of
bulk drugs and pharmaceuticals to the $5-billion plus
African pharmaceutical market.Currently, India exports
close to 10% of its pharma APIs, bulk drugs and formulations
to 15 African nations, with Nigeria being the primary
export destination. Indiaâs aggregate exports stands
at Rs 16,000 crore.
Industry sources said that generic products from India
are facing a price erosion to the tune of 20-25% on
an average, while branded products were more or less
insulated.

Generics in the antibiotics segment in particular has
been under pricing pressure, sources added.

The price war among the close to 1,000 Indian manufacturer
exporters and merchant exporters is more intense than
competition from Chinese players and multinational companies
in markets including South Africa, Kenya, Congo, Sudan
and Ethiopia.

The Chinese players, according to sources, are stronger
in bulk drugs business than in APIs, so are not much
of a competition.

âWe are aware of the price competition among Indian
players. We are thinking of having discussions with
major exporters to sort out the issue,â said a
source.

Major companies that export to the African market include
Ranbaxy, Cipla, Cadilla, Unichem, Alembic and Sun. âThe
price war is also encouraging companies to look at the
South American markets of Venezuela, Bolivia, Costa
Rica, Mexico and Chile, where the volumes as well as
values are high,â said Alok Saxena, director of
Elder Pharma.

The South Asian markets of Malaysia, Indonesia, Singapore,
Burma and China are also attractive.

Another strategy is to sell more of branded products,
and to extend agreements of licensing with partner companies,
for export to the African region.

The African markets were deemed important for the Indian
pharmaceutical exporters who, of late, have been facing
intense pricing pressure from the regulated markets
of the US and Europe. The African countries are dominated
by MNCs, who charge relatively higher prices for their
products.

âThe government has been making efforts to encourage
exports to the African markets, and is also planning
to hold a meeting of ambassadors of the African countries
in Hyderabad in December to highlight the importance
of these markets,â said Dr PV Appaji, executive
director of Pharmexcil, a council set up by the ministry
of commerce and industry to promote exports from India.

Pharmaceutical exports constitute almost 40% of the
total production of pharmaceuticals in India.

Of the total pharmaceutical exports, formulations contribute
nearly 55%, while the rest comes from bulk drugs.

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